Ackerman (D-NY) said Becker, the SEC's general counsel from 2000-2002 and again from 2009 until this month, should have made public the fact that he and his two brothers, Daniel I. Becker and William P. Becker, liquidated their deceased mother's Madoff funds in 2005, earning $1.5 million that court-appointed trustee Irving Picard is now seeking to recoup for Madoff victims in a clawback suit.

"I would not be surprised if the committee would ask these questions at a hearing," Ackerman told The News. "This question is going to come up. I'll ask it if no one else before me does. People have to be held accountable."

Ackerman, whose district includes parts of Queens and Long Island (including Madoff's pre-incarceration hometown of Roslyn), eviscerated Becker's predecessor at the SEC during a memorable hearing in February of 2009, soon after Madoff's massive Ponzi scheme collapsed. Ackerman laid into acting general counsel Andy Vollmer for stonewalling the committee.

Days later, Schapiro dismissed Vollmer and later installed Becker, who had been at the SEC from 1998-2002 - a time when the commission was repeatedly missing red flags that should have alerted them to Madoff's fraud, according to the SEC's own internal reports - before leaving for private practice. He was working at Cleary Gottlieb in 2005 when he and his brothers liquidated their late mother's Madoff investments.

Ackerman said he admires Schapiro but thinks the SEC still hasn't vanquished the culture of cronyism that allowed Madoff's crimes to go unpunished despite numerous red flags and explicit complaints from whistleblowers.

"There has been a suspicious amount of cronyism, one might allege, in these regulatory agencies. It's not difficult to reach that conclusion," Ackerman said. "Something has to be done. We have to have some regulations in place where they have to publicly disclose this sort of thing. It was common sense."

Becker is leaving his post as general counsel and senior policy director later this week. Through a spokesman for the SEC, he declined to answer questions from The News about his family's Madoff ties, including whether he had been deposed or interviewed by Picard prior to the filing of the suit.

"I was not involved with my parents' financial affairs," Becker said in a statement to The News Tuesday and again Wednesday, "and don't remember knowing about any investment with Madoff until after my mother's death in 2004 and the subsequent liquidation of her account."

Among the other recent targets of Picard's clawback suits are Fred Wilpon and Saul Katz, the owners of the Mets, whom Picard slammed with a 373-page lawsuit claiming Wilpon, Katz and the companies they control made nearly $300 million in fictitious profits from Madoff and either "knew or should have known" that Madoff was a fraud. Picard is seeking up to $1 billion from Wilpon, Katz and their partners, he has said.

Wilpon and Katz have vigorously disputed Picard's charges in his suit against them, and their lawyers have indicated that a cornerstone of their legal response will be the SEC's repeated failures to detect Madoff's fraud. Ackerman, for one, thinks Becker's Madoff ties will help Wilpon and Katz.

"How were they supposed to know if the chief investigative agency didn't?" Ackerman says. "It enhances their legal position, I think dramatically, if somebody at the agency has investments. ...Certainly he's a more sophisticated player because he's the chief counsel at the agency that has oversight over the bad guys."

Wilpon and Katz are among hundreds of Madoff victims who are appealing a ruling by U.S. Bankruptcy Court Judge Burton R. Lifland that allows Picard to depart from the statutory definition of "net equity" in bankruptcy cases - the balances reflected on their last account statements prior to Madoff's December 2008 arrest, even if such sums were fictitious - to preclude investors from recovering the money they had with Madoff before the scheme came crashing down.

A hearing before a three-judge panel of the Court of Appeals for the Second Circuit is scheduled for March 3 in lower Manhattan, and several lawyers representing Madoff victims believe the revelation that Becker is a clawback defendant and Madoff investor will hurt Picard's case before the appeals court.

"It's absolutely an embarrassment to Picard," said Helen Davis Chaitman, a nationally renowned lawyer who represents numerous Madoff victims and was one herself. "It's an embarrassment because the (Securities Investor Protection Corporation) and the SEC have aligned themselves with Picard. It's just kind of amazing that the SEC, which is all for honesty and full disclosure, never disclosed the fact that the person they have appointed to deal with investors on this issue had a clawback issue himself."

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According to Chaitman, Becker himself failed to disclose his family's involvement during a June 2009 meeting with attorneys representing Madoff victims. Barry Lax of Lax & Neville, a New York firm with Madoff victims as clients, told The News that Becker failed to disclose his history with Madoff when Lax met with Becker and the SEC just before Becker filed a "friend of the court" brief in support of Picard's strategy in September of 2009.

Lax said he told Becker that in his opinion the net equity concept was both illegal under bankruptcy law and unfair.

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"I think it would've been an appropriate time for Becker to disclose that his family had been involved with Madoff and that he was a Madoff net-equity winner," Lax said. "It was his obligation to recuse himself."

Chaitman said she also doubts Becker's contention that he did not know where his parents had their money invested, and added that she will soon sue the SEC for negligence on behalf of 278 of her clients based on the agency's failure to stop Madoff.

She is seeking insurance for the balances of their Madoff accounts on Nov. 30, 2008, two weeks before Madoff's arrest, plus any clawback exposure they have.

"They investigated Madoff seven times in 11 years, and according to their own investigation and their own inspector general, their failure to shut Madoff down was was an act of utter negligence," she said of the SEC. "If they had done their job, they could've shut Madoff down in 1992 and saved investors $50 billion."